Boe­ing signs $3 bil­lion deal with Iran, a first un­der Trump

The Washington Times Daily - - WORLD - BY NASSER KARIMI AND JON GAMBRELL

TEHRAN | Boe­ing Co. has signed a $3 bil­lion deal with an Ira­nian air­line for 30 new air­craft, of­fi­cials said Tues­day, in the first ma­jor sale by a U.S. com­pany in the Is­lamic Repub­lic since the Trump ad­min­is­tra­tion im­posed new sanc­tions against Tehran.

The deal for the 30 737 MAX air­craft, which in­cludes an op­tion for an­other 30, could force Pres­i­dent Trump to choose be­tween two ma­jor cam­paign prom­ises: tak­ing a harder line against Iran or ex­pand­ing mar­kets for Amer­i­can man­u­fac­tur­ing jobs.

The new agree­ment comes on top of the $16.6 bil­lion sale Boe­ing pre­vi­ously made in Iran fol­low­ing the land­mark nu­clear deal struck un­der the Obama ad­min­is­tra­tion with Iran and five in­ter­na­tional pow­ers. Mr. Trump long has crit­i­cized the atomic deal, though he toured a Boe­ing plant in Fe­bru­ary and touted the firm’s work as proof of a com­ing Amer­i­can man­u­fac­tur­ing re­nais­sance.

“On the one hand, there’s the at­trac­tion of jobs and ex­port or­ders for Amer­i­can goods. On the other hand, of course, they were elected partly on the prom­ise of get­ting tough on Iran,” said Richard Aboulafia, an air­craft an­a­lyst and vice pres­i­dent of analysis at the Vir­ginia-based Teal Group. “They’ll have to make tough de­ci­sions.”

Chicago-based Boe­ing struck the deal with Iran’s Ase­man Air­lines, a firm owned by Iran’s civil ser­vice pen­sion foun­da­tion. Ase­man, Iran’s third-largest air­line by fleet, flies do­mes­tic and in­ter­na­tional routes.

Ase­man spokesman Amir Reza Mostafavi told The As­so­ci­ated Press that the deal came fol­low­ing sev­eral round of talks with Boe­ing over the past year. He said the firms signed the deal March 18 and the first air­craft will be de­liv­ered in 2019. Boe­ing said the first de­liv­ery would be in 2022.

The Euro­pean Union black­listed Ase­man in De­cem­ber be­cause of safety con­cerns, many re­lated to the fact that Iran mod­ern­ize its fleets while un­der in­ter­na­tional sanc­tions. The air­line did not op­er­ate flights to Euro­pean des­ti­na­tions at the time.

Less than a week af­ter that de­ci­sion, the air­line sealed a deal to lease seven planes made by Euro­pean man­u­fac­turer Air­bus. Those air­craft are ex­pected to be­gin ar­riv­ing next month.

The new Boe­ing deal was made pos­si­ble by the nu­clear agree­ment reached be­tween Iran and world pow­ers. Boe­ing struck a De­cem­ber deal with Iran Air, the coun­try’s flag­ship car­rier, for 80 pas­sen­ger planes worth $16.6 bil­lion. Iran Air also will lease 29 new Boe­ing 737s.

In Jan­uary, Iran Air signed agree­ments to buy 118 planes from Air­bus, es­ti­mated to be worth some $25 bil­lion. As­ghar Fakhrieh Kashan, a deputy trans­porta­tion min­is­ter, later said Iran would cut the num­ber of Air­bus planes to 112.

Wash­ing­ton granted per­mis­sion for Boe­ing and Air­bus to make the ini­tial sales in Septem­ber. Both man­u­fac­tur­ers needed the ap­proval of the U.S. Trea­sury for the deal be­cause at least 10 per­cent of the air­planes’ com­po­nents are of Amer­i­can ori­gin. The Trea­sury sim­i­larly would need to ap­prove the lat­est deal.

Home to 80 mil­lion peo­ple, Iran rep­re­sents one of the last un­tapped avi­a­tion mar­kets in the world. How­ever, West­ern an­a­lysts are skep­ti­cal that there is de­mand for so many jets or avail­able fi­nanc­ing for deals worth bil­lions of dol­lars.

An­other wild card is U.S. pol­i­tics. Mr. Trump has threat­ened to rene­go­ti­ate terms of the Iran deal, while some law­mak­ers have sug­gested putting new sanc­tions in place and crit­i­cized Boe­ing for sell­ing air­craft to Iran. House Fi­nan­cial Ser­vices Com­mit­tee Chair­man Jed Hen­sar­ling cau­tioned U.S. banks about par­tic­i­pat­ing in the con­tract and noted that the deal was ad­vanc­ing on the same day Syria, Iran’s ally, stood ac­cused of a chem­i­cal at­tack on rebel po­si­tions in that coun­try’s civil war.

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